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Income Tax Act 2007

Income - Exempt income

CW 17C: Payments for overtime meals and certain other allowances

You could also call this:

“Tax-free meals and allowances for some workers”

You don’t have to pay income tax on some meals and allowances your employer gives you.

If you work overtime, your employer can give you a meal or pay for your meal without you having to pay tax on it. This only works if you’ve worked at least 2 hours of overtime that day. Your job must also either say in writing that you get paid for overtime, or your employer usually pays for overtime meals.

Your employer can also give you a tax-free sustenance allowance for a day if you meet certain conditions. You need to work at least 7 hours that day. Your job must require you to work outside and away from your usual workplace for most of the day. You also need to do a lot of walking or cycling around an area. It must be hard for your employer to give you enough food while you’re working outside. The allowance is meant to recognise that your work is physically hard and that your employer would normally provide drinks like tea or coffee at your usual workplace.

For both overtime meals and sustenance allowances, your employer needs to have a usual way of paying for these. The amount they pay should be either what you actually spent (with proof if it’s over $20 for an overtime meal) or a fair guess of what you or people like you would likely spend.

In this law, ‘overtime’ means any time you work beyond your normal hours as written in your employment agreement.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2539606.

Topics:
Money and consumer rights > Taxes
Work and jobs > Worker rights
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CW 17B: Relocation payments, or

“Tax-free payments for work-related moving expenses”

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CW 17CB: Payments for certain work-related meals, or

“Tax-free meals when working away from your usual workplace”

Part C Income
Exempt income

CW 17CPayments for overtime meals and certain other allowances

  1. An amount that an employer pays to or on behalf of an employee for a meal for the employee when the employee is working overtime is exempt income of the employee.

  2. An amount that an employer pays to an employee as a sustenance allowance for the employee for a day is exempt income of the employee if—

  3. the employee works a minimum of 7 hours on the day; and
    1. their employment requires them—
      1. to work outdoors and away from their employment base for most of the day; and
        1. to undertake a long period of physical activity in travelling through a neighbourhood or district on foot or by bicycle; and
        2. it is not practicable for the employer to provide sufficient sustenance on the day for the period when the employee is working outdoors; and
          1. the allowance recognises—
            1. the arduous physical nature of the employee's work as described in paragraph (b); and
              1. that the employer would normally provide tea, coffee, water, or similar refreshments at the employment base in the course of their business.

              2. Subsection (1) applies only if—

              3. the employee has worked at least 2 hours' overtime on the day of the meal; and
                1. either—
                  1. the employee's employment agreement provides for pay for overtime hours worked; or
                    1. the employer has an established policy or practice of paying for overtime meals.

                    2. Subsection (2) applies only if the employer has an established policy or practice of paying a sustenance allowance.

                    3. The amount paid must be—

                    4. the actual cost to the employee, and for an overtime meal referred to in subsection (1), with documentation required for amounts over $20 per meal; or
                      1. a reasonable estimate of the expenditure likely to be incurred by the employee or a group of employees for whom an amount is payable.

                        1. For the purposes of this section, overtime, for a person and a day, means time worked for an employer on the day beyond the person's ordinary hours of work as set out in their employment agreement.

                        Notes
                        • Section CW 17C: inserted (with effect on 1 April 2008), on , by section 45 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).